Nasdaq, S&P 500 hit new highs, Fed rates steady: Market trends

Yahoo Finance's Alexandra Canal joins Asking for a Trend to break down the day's market trends.

The Nasdaq (^IXIC) and S&P 500 (^GSPC) closed at new records as investors digest cooler-than-expected inflation.

The Federal Reserve left interest rates unchanged, projecting one cut by the end of the year, with most eyes on September.

Finally, Apple (AAPL) briefly surpassed Microsoft (MSFT) in market capitalization after announcing its AI initiatives.

For more expert insight and the latest market action, click here to watch this full episode of Asking for a Trend.

This post was written by Melanie Riehl

Video transcript

Let's start with those markets.

The S and P 500 tech heavy NASDAQ closed at a new record investors digesting cooler than expected inflation and the Fed's latest policy decision here with more on the trading day takeaways.

Let's get to Yahoo Finance's ALEC now.

Hey, Josh.

Well, you said it once again, new record through the S and P 500 the NADA and I want to start here with the S and P. It is the 28th record close for the S and P so far this year right now, we're treating it around levels of 5400 that is already above most year and targets for those analysts and strategists, which is crazy since we're already six months into the year.

I was joking with our Marcus reporter Josh for that.

We're probably going to get more uh uh upticks on that when it comes to those year end targets, U BS and BMO have around 5600.

So definitely more room to run at that front.

I'm just going to refresh this a bit.

But when you think about the NASDAQ as well, 16 of record closes for the NASDAQ so far this year.

And then I want to take a look at small caps is an interest rate sensitive area of the market.

We mentioned that cooler than expected inflation data, we know that the fed is projecting at least one cut this year, we saw small caps finish the day in the green.

And then finally, let's take a look at the 10 year Treasury note.

This was shortly after that inflation print falling 11 basis points to trade near 4.3%.

So we'll see where things go from here.

But overall a pretty positive day in the market, I would say.

Yeah, well, I mean, I listen, you, you listen to the fed and rates unchanged, but also I think you got that CP I print this morning it was two good prints in a row and JP tell you at least I think how the fed put they're making mo kind of modest progress on their inflation target, right?

And related to that, all of that is fueling odds of a September rate cut.

So, you know, we did have only one cut from the fed.

That's what they're projecting.

That is down from the three cuts that they projected in March.

And although that's less than what the markets were anticipating fed.

Chair Powell and his presser didn't necessarily shut, shut, shut down the option of potentially having two cuts.

And if you take a look at the latest data from group 61% think that we're going to see some easing beginning in September.

And that is up from just a day prior.

And like it was mentioned with, with those fed projections, it was pretty close.

About 88 fed officials think that we are going to see two cuts, seven think we're going to see one.

So it's a toss up at this point when it comes to how many cuts that will see And it looks like the markets are thinking maybe two with the first one coming in September.

Yeah, interesting.

We had, you know, economists, some of the push back you're already seeing on some of this, some thinking, you know, we'll see how that goes whether they might have to backtrack on some of that dot plot.

But we'll see how the, how the data goes from here for.

And that's something that Jay Powell continuously stress.

And then finally my third point, Apple briefly surpassing Microsoft in market cap.

They weren't able to finish the job.

But look at how close this is.

Of course, this comes after Apple's Artificial Intelligence announcements, Apple, the stocking the best two day performance since November 2022.

So something to keep track of something to keep an eye on, especially as Apple struggled at the start of this year.

But now we're seeing it neck and neck with Microsoft, you gotta think some of that is investors must be betting that what Tim Cook said is gonna drive that product cycle.

Yeah, it was interesting because I feel like it was a mixed bag on the street with how important or how, how much this is going to move the needle for apple, moving forward.

But you, you don't really want to bet against apple when it comes to this stuff.

All right.

Thank you.

Appreciate it.